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For Release — December 28, 2004

COSTS FOR EMPLOYEE
BENEFITS, ENERGY, TAXES ADD UP TO
HIGHER OVERALL COST OF DOING BUSINESS IN NEW YORK STATE, DATA SHOW

ALBANY The cost of doing business in New York State
is substantially higher than in most other states because employers
here must pay more for employee benefits, energy, taxes and other costs,
according to a new "Just The Facts" data compilation by The
Public Policy Institute.

One business-climate comparison included in the new installment shows
that the burden of these high costs clearly outweighs New York's advantages,
such as technology and labor force, in terms of the state's overall
competitiveness.

The overall average cost of electricity in New York is second-highest
in the country, after Hawaii's. Commercial users of electricity in
the Empire State pay an average 43 percent more than businesses elsewhere
in the country, while industrial prices here are 19 percent higher
than average.

Natural gas, another important source of energy for businesses, is
also expensive in New York. Average industrial prices for natural gas
are 37 percent above the national average, Just The Facts shows.

Average employer costs for work-based health insurance in New York
are second-highest in the country at $6,671 per year, according to Just
The Facts. The total average premium, including employees' costs,
is third-highest in the nation.

The average cost of a workers' compensation case in New York was third-highest
in the nation, some 80 percent higher than the median figure for all
states, the new report shows. Most neighboring and competing states,
including others that are highly unionized such as New Jersey and Michigan,
had much lower workers' comp costs.

The average effective tax rate for unemployment insurance in New York
is 28 percent higher than the national average, according to the report.

Overall business costs in New York, including those for labor, energy
and taxes, are 9th-highest in the country, Just The Facts shows.
While labor costs on average are slightly lower in New York than most
other states, high energy and tax costs more than make up that difference,
according to the Relative Cost of Doing Business Index compiled by
Economy.com and included in Just The Facts.

The report includes three other ratings of business-climate competitiveness,
each of which includes a number of factors:

New York's business tax climate is among the least favorable in
the country, based on elements including the overall burden, complexity
and cost of compliance. States such as Massachusetts, Michigan and
Pennsylvania have much better tax systems for employers, according
to a Tax Foundation index cited by the Institute.

The State Competitiveness Index includes relative strengths in
technology and labor force along with government fiscal policy, legal/regulatory
systems, infrastructure and finance. By this measure, New York ranks
31st in competitiveness among the 50 states — well behind states
such as Massachusetts, Virginia and California, but ahead of Florida,
Ohio and Illinois.

New York ranks last among the states on the U.S. Economic Freedom
Index, which includes measures of fiscal burdens, size of government,
welfare spending and other elements.

Just The Facts also includes previously available data including
the latest Census Bureau comparisons of taxes and spending, and recent
employment trends, in all the states. Those tables show that combined
state and local taxes in New York are the highest in the country, and
that the Empire State lags most others in keeping and creating jobs.